Sunday, January 3, 2016

A recent article by Lyman Stone makes the argument that the return to cities observed during the late 2000s, rather than being primarily a reflection of increasing preferences for urban living, was a temporary phenomenon caused by a bubble in suburban real estate which for a brief time made city renting significantly less expensive than suburban buying. Under this theory, there was no great change of preferences among the so-called millenial generation or others, but only a temporary price inversion caused by fleeting and unsustainable cost factors.

The general idea that land rents are higher toward city cores, and lessen in a concentric pattern outwards from the center, is not new. As the "bid rent theory," it was developed by William Alonso in the 1960s, and has applicability to cities from the distant past all the way down to the present. Modifying but not necessarily contradicting this theory is the concept of the "favored quarter," in which bid rents are determined by cardinal direction from the core rather than by distance alone. In contemporary cities, both the bid rent and favored quarter can be easily found and mapped.

In general terms, the bid rent theory holds that commercial uses will compete more intensively for space in central areas, resulting in higher density (and higher cost) housing forms as residential uses are forced to bid against non-residential uses for scarce land. By contrast, the favored quarter may represent a wealthy neighborhood using the zoning power or self-rule to insulate itself from non-residential or high-density residential competition, thereby securing what is in effect a subsidy for a valued central location. This sort of abuse of the zoning power, at city-wide scale, has been the subject of a tremendous debate in recent years.

None of this is new or particularly controversial. The bid rent theory does not presume anything about residential preferences, so far as I am aware, though we might imagine that the same proximity and centrality that is attractive to commercial uses is also appealing to residents who could enjoy that same immediate proximity and centrality as a major amenity. At the same time, the hustle and bustle of commercial uses are repellent to those who, for their residential spaces, crave some degree of quiet enjoyment. Central areas are also likely to be disfavored by those, such as young families, who value large living spaces and high quality public schools above even immediate conveniences where both preferences cannot be met simultaneously.

In a post a while back, I also doubted as to whether these underlying preferences had changed, and that inflated costs in suburban areas and/or foreclosures, had driven higher demand to rent in urban areas. This is not really contradicted by the National Community Preference survey, which continues to show that people highly value the single-family home and immediate, walkable convenience:

The most undersupplied areas, relative to demand, are the "suburban neighborhood with a mix of houses, shops and businesses," the "small town," and the "rural area." These patterns seem to be amplified for the millenial generation, with a particular emphasis on walkable neighborhoods. Oversupplied, relative to preference, are the mostly residential suburb and city (although I suspect many of the "city" residential areas are largely "suburban" in character). I do not know exactly how "small town" differs in form from the mixed suburban area, but one imagines the category to be inspired by the fictional New England village of Stars Hollow from the Gilmore Girls show, with its vaguely New Urbanist mix of houses and shops with quirky and eccentric independent proprietors immune from the long arm of Walmart:

Stars Hollow set, and also, I believe, for Hill Valley from Back to the Future.

The allegedly unrealistic image of the town in the show has been critiqued here, but I still think the popularity of the series has something to tell us about the environments and lifestyle people idealize, even if the particular example in the show may not be economically plausible.

Lest we imagine that these choices are in fact economically or spatially incompatible, or that what is being sought is the unobtainable single-family house in Central Park, this is the essence of Japanese market urbanism: an extremely compact assemblage of small single-family homes (and some apartments) that is pedestrian and bike friendly. This must be the case, since lower densities will result, for the majority, in the perception of a "residential-only" neighborhood. Naturally, Japanese-style development (as described by Nathan Lewis here) is one thing which the American cities have almost entirely failed to provide, although a few neighborhoods here and there, generally developed before 1930, provide a reasonable facsimile.

Tokyo neighborhood.

Quite a bit has also been written as to whether the millennial generation will, in time, leave urban areas, as though there was some question as to whether this particular age bracket would buck the trend of all groups before it. As Joel Kotkin wrote two years ago:

"The millennial “flight” from suburbia has not only been vastly overexaggerated, it fails to deal with what may best be seen as differences in preferences correlated with life stages. We can tell this because we can follow the first group of millennials who are now entering their 30s, and it turns out that they are beginning, like preceding generations, to move to the suburbs.
....
These trends can be seen on a nationwide basis. Among the cohort of children under 10 in 2007, the number who lived in core cities as of 2012, when they were 5 to 14 years of age, was down by 550,000. Families are the group most likely to move either to the suburbs or smaller towns. This movement, plus the high degree of childlessness in large urban cores, suggests that many of those who are leaving the core cities in their early 30s are parents with young children."

Now, for families with young children approaching kindergarten age who lack the resources for expensive private tuition, school quality emerges quickly as an important preference, subordinating almost all other concerns. But this does not mean that these families do not desire an urban lifestyle, or, by their housing choices, are rejecting such a lifestyle. The survey data seems to broadly refute that idea. Rather, the cruel spatial economics of exclusion favor low-density, restrictively-zoned places for "good schools," and American cities offer few other intermediate options. Abandoning an urban life, with its high costs, is a sacrifice for one's children rather than, necessarily, a pursuit of an ideal. The choice is reinforced by the panoply of incentives the US tax code offers to those who would buy rather than rent. Many other families with financially limited choice, shut out of suburban options by restrictive zoning and other exclusionary policies, must remain in urban areas regardless of their preferences.

Seen in this context, I do think the New Urbanism has tapped in to something important in the American psyche. Only, as Nathan Lewis has written about, it has generally (but certainly not always!) done so too literally, using lackluster American examples as inspiration rather than successful ones from abroad. I do not think the American imagination is so literal, though. Stars Hollow passed as a New England town even though it bears no resemblance to the typical Connecticut small town with its large central green and sprawling layout. What was important was not the specific form, but rather the walking lifestyle, the spontaneous interaction and the community as a whole. The set simply provided the urban form necessary to sustain the belief that this lifestyle was possible for the characters.

If a real-world development does not offer a sufficient density, or sufficient flexibility in terms of mixing of uses, these things will not occur, and you will have little more than a film stage set. Imitate a Japanese neighborhood, on the other hand, and you may have more success. Perhaps clad the buildings in Georgian and Colonial facades for the tastes of American buyers, but leave the form alone. Do not obsess over mixing of uses or "apartments over the shop" -- these things take time and happen gradually, not all at once and from the beginning. A suburb built to this form, odd as it may seem, will meet the stated preferences of American buyers, families included. The demand is certainly there.

The New Urbanism, whatever its failings, has at least recognized the situation, changed the conversation and opened new possibilities not only in terms of building, but regulatory reform and making possible traditional forms of urbanism under contemporary city codes. This blog is intended as a sort of continuation of this new conversation using a slightly different vocabulary.

As to what such a new neighborhood might look like, Nathan Lewis has already written at length, but in another post, I'll reiterate some of his findings along with an example that could be done today.

12 comments:

1. In a lot of places, the favored quarters are also where the edge cities sprout. In California, the NIMBYs actually encourage this, since commercial uses don't require local services like schools. The Silicon Valley suburbs with several times as many jobs as employed residents are very rich. In New York it's a bit more complicated, in that some edge cities are based on old town centers (White Plains, Stamford, Greenwich) that are themselves poorer than their surroundings, but the suburbs a few km from those edge cities are again rich. They get easy access to jobs and insulation from the bottom 80% of the population. In Washington, the same happens in Northern Virginia.

2. Usually, rents depend on where you're renting more than on housing type. For example, on a per-m^2 basis, do market rents in low-rise apartments differ much from rents in high-rise ones on the same block? You sometimes see differences that are really about year of construction or market segmentation: in New York, private-sector high-rise residences tend to be new luxury construction, whereas low-rise residences could have been built anytime in the last 150 years. But recent low-rise luxury residences don't seem to differ much from high-rise ones in market segment or in rent. If housing type is an amenity, in any direction, it seems like a very weak preference. The Village isn't undersupplied because of the housing mix; it's undersupplied because it's a favored location for people who'd like to pretend they're cultured and artistic and not gray business types like on the Upper East Side.

3. You talk a bit about buying exclusion, but not enough. In both the favored-quarter suburbs and a few favored urban neighborhoods like the Village, there's an exclusive element going on, in the sense that if the areas become more affordable to the working class, then upper class demand will go down. Pete Saunders has some good posts from last year about what blacks seek versus what whites seek, and about insulation versus isolation. With schools, the issue is that various Supreme Court compromises result in white people not being allowed to have minority-free schools unless they're based on legacy district boundaries. If you allow more density in the Dariens of the country, it will not be possible for whites to maintain their demographics, nor will it be legal for them to carve smaller school districts excluding minorities.

4. Japan indeed is a positive example of housing policy that gives people what they want, unlike the US and Europe. However, Canada is like Japan in that it has lax zoning regulations in the major cities, and affordable housing even in large global cities. This is done mostly through a housing mix that's similar to what the US supplies - single-family houses on large lots and high-rise clusters - but with more aggressive zoning permitting the latter. The resulting urban layout isn't great - I find Central Stockholm nicer to walk around than just about anywhere in Vancouver. But I also recognize that in Central Stockholm you have to wait 30 years for a rent-controlled apartment, or pay on the order of $40 per month per m^2 of usable space, where in one of Vancouver's better inner-urban neighborhoods I paid around $20, which allowed me to live in a far better apartment for approximately the same rent.

Alon -- thanks for the comment. Strongly agreed on your point #2. The preference I see here is really for housing size -- for families -- rather than housing type. And if you are going to buy or rent in a location remote enough that you can afford a reasonably large space for a kid or two plus dog, most likely the home type will be a single-family one or possibly low-rise multifamily. And as you say, that natural affordability (of the single-family suburban type) must be countered by exclusionary zoning to exclude the natural consumers of such housing (those of moderate incomes). I did not delve further into this topic in the post since it was intended to be about preferences rather than zoning and segregation per se, which I've written lots about elsewhere. I did assume, though, that preferences among poor, middle class and wealthy families were broadly the same.

I've read Pete's posts on these topics but need to go back and review again. Interesting perhaps to note the recent court battles in Darien using Connecticut's Section 8-30g zoning override provision, which allows developers a presumption of zoning validity if a town is not permitting enough "affordable" (statutorily defined) housing and if there is a 30% affordable set-aside in the proposed development itself.

Here's a story from last year about Westport trying to wriggle its way out of the requirements: http://www.ctpost.com/local/article/Forum-explores-ways-for-Westport-to-escape-impact-6037924.php

Basically, you need to go to the suburbs to have housing that's affordable on a per sf basis. But then you need to make sure the homes are big, so that they're unaffordable to lower income households. And then to make sure the lower income households can't pool their resources to live in a single house, you have occupancy limits.

Yes, good point. This is why I say the New Urbanism has really been the lone voice trying to bring back the form of some of these older development styles, even where the transportation mode is contemporary (and why someone said they it would be better called “the Old Suburbanism”). The charge is made that this is anachronistic, and while there is some validity to that argument, urban form is urban form notwithstanding the absence of a streetcar line. Kentlands for all its flaws is an objectively superior living environment to the typical suburban Maryland cul-de-sac compounds. It’s a least trying to make something a little better. Unfortunately, the Kentlands knock-offs have been far worse, and the examples are not inspiring in the least.

I do think high transit use is important though. When you look at transit suburbs the retail isn't just located anywhere, it's located next to the streetcar line or rail stop. I don't think this is so much because people took transit to their shopping destinations, they probably did not do that much. I think it's mostly because whenever the suburb's residents left or came back to their suburb from another part of the city, like for work trips, it was by transit. In those situations, retail wouldn't be seen as "a 5-10min walk from home", you're passing right by the shop entrances as you walk home from the transit stop, no extra walking involved. Even if you aren't planning on buying anything, walking by the same stores every day (or even seeing them out the streetcar window) will help get them noticed, which is especially useful for independent stores that don't have brand recognition.

These days with auto-oriented suburbs, the same principle is put to use, but with roads and highways instead of transit. If travel to areas outside the neighbourhood is going to be done by car, why would you go home and then walk 10 min to the grocery store instead of just stopping by at the supermarket that's literally on the way home, right along the highway you take to go anywhere.

Without transit, you're in essentially the same situation as was described in the Stars Hollow blog post you linked. People are going to be driving to the big boxes for much of their retail needs, and maybe you can get lucky and have a few local boutiques carving out a niche that are in a more pedestrian oriented setting. Or maybe you try to make the shopping centres more pedestrian friendly once they get there (by car), like the shopping malls and lifestyle centres.

Or maybe something like this near where I grew up:https://www.google.ca/maps/@43.5095157,-79.6695313,320m/data=!3m1!1e3An "entertainment district" anchored by a movie theatre with a dozen restaurants and pubs, nightclub and a glow in the dark golf course (and LA fitness?).

You'll also have big box stores so that people can buy everything under one roof in bulk purchases to avoid having to drive or walk across parking lots from shop to shop and to be able to shop as infrequently as possible. In old neighbourhoods you'd have the butcher, deli, fruit market, spice shop, bakery... as separate stores but within a short walk of each other. People probably also bought things more frequently rather than just going to the grocery store once a week.

With auto-oriented retail, it's difficult for independent shops to get noticed. You drive by fast, and it's hard to get a feel for what a business is like just from the big sign along the road. It's better if you can see into the shop windows from the sidewalk. You can't do that going 50mph, busy looking where you're driving, with the shop far behind a large parking lot and landscaping berm.

Kentlands does seem to be trying to "make the best of a bad situation". You still have quite a few chains and big boxes, and they're located along the big regional road with loads of parking. But you still try to avoid any unnecessary barriers to walking to those stores, and avoid forcing locals to walk across big parking lots, trying to make them both drivable and walkable. And then you put the independent shops in between the residences and big boxes in a more pedestrian oriented setting (although there's still plenty of parking behind the shops). If you're driving from the big boxes to a home in the Lakelands, you'll probably drive along part of Main St, which is traffic calmed enough that you could notice the independent businesses.

I find the conclusion interesting when the two examples show a little different message. These people did want to live within walking distance of urban conveniences...shopping, restaurants, entertainment. That, to me, is not the suburbs as we typically think of them. There are some close-in neighborhoods around city centers that offer such convenience, but if most people want this (and I believe they do...not just millennials, does that not force us to higher densities to meet that demand? How can we meet such demand with single family detached product?

Hi Diane -- thanks for the comment. I agree that the suburbs as we think of them cannot provide what the public, and millennials especially, claim to want. But single-family detached homes can be designed at urban densities if streets are narrow and yards are kept very small. Having some apartments mixed in is probably a good idea too. The United States simply hasn't built many neighborhoods like this. I will follow up with a post showing exactly how this might be done.

I grew up in an actual New England town. It's a shitty way to live. You could walk across the whole thing in 20 minutes, but there were no sidewalks and everyone drove. The only independent businesses with any staying power were the bars, there was no culture, no decent coffeeshops, an annual fair designed for residents of Tennessee rather than Vermont -- complete with the John Birch Society and people doing a roaring trade in Confederate flags, and there was hardly immunity to Wal Mart. People would drive the two and a half hours to the nearest Costco rather than buy anything local.

It's quaint, all right, as long as you don't stay long enough to read about the latest heroin overdoses.

Hi Matt -- I won't disagree. It's the image that entrances people, not the reality. Most people pining for a small New England town probably never lived in one. Many of the small towns in Connecticut are parts of larger metro areas anyways, and function as part of the regional economy. The independent towns that have done the best seem to make the most of their tourist potential.